F&G Annuities & Life Reports Significant Decline in Q4 & Full Year 2025 Earnings

summarizeSummary

F&G Annuities & Life reported a substantial decrease in net and adjusted net earnings for both the fourth quarter and full year 2025 compared to the prior year, primarily due to lower alternative investment income, while also announcing strategic asset management and capital actions.

check_boxKey Events

• Significant Earnings Decline

  Full year 2025 adjusted net earnings attributable to common shareholders were $482 million ($3.64 per diluted share), a notable decrease from $546 million ($4.30 per diluted share) in 2024. Fourth quarter adjusted net earnings also fell to $123 million ($0.91 per share) from $143 million ($1.12 per share) in the prior year quarter.

• Impact of Alternative Investments

  Investment income from alternative investments for the full year 2025 was $278 million below management's long-term expected return of approximately 10%, significantly impacting adjusted net earnings.

• Record Assets Under Management

  The company achieved record assets under management before flow reinsurance of $73.1 billion as of December 31, 2025, an increase of 12% over year-end 2024, with retained AUM reaching $57.6 billion.

• Strategic Sale of Bermuda Subsidiary

  F&G announced the planned sale of its Bermuda legal entity, F&G Life Re Ltd, including an inforce block of approximately $1.9 billion, expected to close on March 1, 2026. This follows a partial recapture of $900 million in liabilities and a $200 million dividend of assets at year-end 2025.

auto_awesomeAnalysis

F&G Annuities & Life reported a substantial year-over-year decline in both GAAP and adjusted net earnings for the fourth quarter and full year 2025. This underperformance was primarily driven by lower-than-expected investment income from alternative investments, which was $278 million below management's long-term expectations for the full year. Despite the earnings miss, the company achieved record assets under management (AUM) before flow reinsurance of $73.1 billion, an increase of 12% year-over-year, and maintained a strong capital position with an estimated risk-based capital (RBC) ratio of approximately 430%. The company also announced the strategic sale of its Bermuda subsidiary, F&G Life Re Ltd, expected to close in Q1 2026, and completed a distribution of shares by FNF, increasing its public float. The significant drop in profitability metrics, occurring while the stock is trading near its 52-week low, indicates a challenging period for core earnings power despite strategic growth initiatives.